QuadrigaCX was once one of the largest cryptocurrency exchanges in Canada, but its collapse in 2019 left thousands of users without access to their funds. The exchange’s CEO, Gerald Cotten, died unexpectedly in December 2018, taking the passwords to the exchange’s cold wallets with him. This meant that approximately $190 million worth of cryptocurrency was inaccessible to QuadrigaCX’s users.
After a lengthy legal battle, it has been announced that QuadrigaCX’s victims will receive 13% of their lost funds. This is a small consolation for those who lost significant amounts of money on the exchange, but it is better than nothing.
The decision to distribute the funds was made by Ernst & Young, the court-appointed monitor overseeing QuadrigaCX’s bankruptcy proceedings. The monitor has been working to recover as much of the lost funds as possible, but it has been a difficult process.
One of the main challenges has been the fact that Cotten was the only person who knew the passwords to the exchange’s cold wallets. This has led to speculation that he may have faked his own death in order to steal the funds. However, there is no concrete evidence to support this theory.
Another challenge has been the fact that QuadrigaCX’s funds were commingled with Cotten’s personal funds. This means that it has been difficult to determine which funds belong to the exchange and which belong to Cotten personally.
Despite these challenges, Ernst & Young has managed to recover some of the lost funds. In total, approximately $46 million has been recovered so far. This includes $25 million in cash and $21 million in cryptocurrency.
The decision to distribute 13% of the lost funds was based on a number of factors, including the amount of funds that have been recovered and the number of claims that have been filed by QuadrigaCX’s users. The monitor has also taken into account the fact that some users may have been complicit in the exchange’s collapse by using it for illegal activities.
While the distribution of funds is a positive development for QuadrigaCX’s victims, it is important to remember that they are still far from being made whole. Many users lost significant amounts of money on the exchange, and 13% of their losses is unlikely to fully compensate them for their losses.
The collapse of QuadrigaCX serves as a cautionary tale for anyone who is considering using a cryptocurrency exchange. It is important to do your research and choose a reputable exchange with a track record of security and reliability. It is also important to keep your cryptocurrency in a secure wallet that you control, rather than leaving it on an exchange where it can be vulnerable to theft or loss.
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